Item 8.01 Other Events
Petrolia Energy Corporation ("Petrolia" or the "Company"), the parent company of
Petrolia Canada Corporation ("Petrolia Canada") entered into a Letter Agreement
on June 11, 2022, dated effective as of June 1, 2022 (the "Agreement") with Blue
Sky Resources Ltd. ("BSR"), a Canadian company, to sell Petrolia Canada's fifty
percent (50%) Working Interest in the Utikuma Lake Oil Field (the "Asset") in
Alberta, Canada to BSR.
Under the Agreement, BSR agreed to purchase Petrolia Canada's fifty percent
(50%) Working Interest in the Asset for the purchase price of SIX MILLION
CANADIAN DOLLARS ($6,000,000.00 CAD). The parties specifically agreed that (i)
BSR would deposit SIX HUNDRED THOUSAND CANADIAN DOLLARS ($600,000.00 CAD) in an
escrow account upon execution of the Agreement; and (ii) at closing the
remaining FIVE MILLION FOUR HUNDRED THOUSAND CANADIAN DOLLARS ($5,400,000.00
CAD) would be paid subject to the following two (2) Petrolia Canada debt
deductions: (i) a loan repayment in the amount of TWO MILLION FIFTY-ONE THOUSAND
ONE HUNDRED FIFTY-TWO US DOLLARS ($2,051,152.00 US) plus interest of ONE HUNDRED
FORTY-ONE THOUSAND NINE HUNDRED SIXTY-FOUR US DOLLARS ($141,964.00 US); and (ii)
a security release against the Asset in the amount of EIGHT HUNDRED SEVENTY-FOUR
THOUSAND US DOLLARS ($874,000.00 US).
Additionally, Petrolia Canada and BSR agreed that an audit to reconcile all
operating accounts and to determine any accounts owing between Petrolia Canada
and BSR and a Pre-closing Settlement ("PCS") Statement of accounts to be
provided to Petrolia Canada by BSR would be completed prior to closing.
The closing of the purchase and sale transaction covered by this Letter
Agreement shall occur five (5) days after the PCS Statement has been agreed to
between the parties.
A copy of the Letter Agreement is being submitted as Exhibit 1.0 with this
filing.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
1.0* Letter Agreement entered on June 11th 2022, by and between Blue
Sky Resources Ltd. and Petrolia Energy Corporation.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith.
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